There are Two Types of Economies, AI and Everything Else, says Tchir

Summary

Peter Tchir argues there are two economies: AI/data center compute and everything else. The AI boom has been firing on all cylinders, but early cracks like Meta offering excess compute raise risk of oversupply. Micron stands out with locked-in long-term orders. Market structure via leveraged ETFs may amplify downside if compute spending fades. On the Fed, Tchir believes markets are wrong to price in hawkishness; the Fed is likely to turn dovish as inflation metrics improve.

• Two economies: AI/compute build vs. the rest
• AI spending has been a huge market driver, but cracks appearing (Meta may sell excess compute)
• Risk of compute demand fading in two years could hit AI-related stocks
• Micron differentiated by having orders locked in for years
• Triple-leveraged SOX ETF amplifies moves and could magnify downside
• Market structure suggests more susceptibility to downside on AI doubts
• Fed likely more dovish than priced, using softer inflation metrics to ease soon